Thursday, 15 July 2010

Kudrin urges higher pension age

Finance Minister Alexei Kudrin and President Dmitry Medvedev seem to be locked on a collision course over retirement ages.
The pair differed once again on Tuesday, with Kudrin telling delegates at an investment forum that Russians would have to work longer for their pensions before the president pointedly ignored the issue in his budget speech.
Faced with an ageing population and a likely shortfall in revenue to feed the national pension pot, Kudrin is eager to push the official retirement age up by as much as five years, from 60 for men and 55 for women.
In a country where male life expectancy hovers around 59 years, the prospect of delaying retirement age is unlikely to be supported by voters.
“If the government increases the pension age, it is a sign for people that the system is tightening – so it is not good for their election approach,” said Olga Kuzina, a socio-economist at the Higher School of Economics.

Hours after Kudrin had spoken at the Renaissance Capital annual conference, Medvedev delivered his budget speech – making no mention of a longer working life for Russians.
He acknowledged that there were “serious challenges” facing the system, but stopped well short of endorsing – or even referring to – Kudrin’s call to raise retirement ages.
Kudrin had acknowledged at the forum that his plan would come to fruition “maybe not today, and maybe not tomorrow but sometime”, quoting dialogue from Humphrey Bogart in Casablanca. Kuzina said the decision was likely to be delayed until after the 2012 presidential election.
The difference between the positions was perhaps summed up by Kudrin, who explained that his job was simply to ensure a balanced budget.
The president, mindful of the 2012 election, used his budget speech to court groups most affected by the crisis as the government remains aware of potential social tensions.
“What’s especially important is that we were able to maintain social stability, mitigate the social impacts of the [economic] crisis, and ensure – even in this difficult economic setting – a real increase in the level of support provided to our most vulnerable citizens, including pensioners,” Medvedev said.
Pensions are expected to grow between 33 per cent and 42 per cent this year from the January average of 7,100 roubles a month.

“Pensioners are very good at turning out in elections and choosing the proper candidates,” said Kuzina.
Russia has one of the lowest retirement ages in Europe – and attempts to increase it have divided political parties.
Nikolai Levichev, leader of the nationalist Just Russia party’s faction in the State Duma, told that the president had deliberately ducked the issue, adding that he did not understand Medvedev’s position.
But there was support from United Russia Duma deputies, mindful of upcoming elections and the dangers of inflicting unpopular measures on the public.
United Russia deputy chairman Valery Ryazan agreed with Medvedev’s reluctance to raise the age limit.
“We need to improve working conditions and increase employers’ contributions to the pension fund,” he informed.

Medvedev, however, recently introduced new legislation which would force state employees to step down at 65.

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